E15 May Take Years to Impact Grain Demand

How long will it take for E15 to impact grain demand? Some estimate it could be 15 years.
( FJM )

More lawsuits are being threatened against the President's announcement to allow the sale of E15 year round. The oil industry saying it will sue the Trump administration if it follows through with its plans. The American Petroleum Institute says it thinks E-15 year-round is against the law. Currently, sales of E15 are limited to 8 months out of the year.

President Trump made the E15 announcement earlier this month, however, it still needs approval from the EPA.

Pete Meyer with S&P Global Platts says once formally approved it will take time for E15 to make its way to gas stations.

"It is the opinion of S&P Global Platt's that it will take us 15 years to go nationwide," says Meyer. "There's so much infrastructure that has to be put in."

Meyer talking with Tyne Morgan on AgDay-TV says that E12 might have been a better choice.

"You could have still put the gasoline in the same tanks," says Meyer. "Now you have to separate the tanks you have to put extra tanks in."

Some estimate that adding E15 to the nation's fuel supply would chew through an extra 2 billion bushels of corn.

"Well, in theory, you're right," says Meyer. "If you're if you're increasing your blended rate by 50% and you're using round numbers of five billion bushels, we should see a 40% increase or 2 billion bushels."

Meyer says getting to 2 billion bushels is likely to take a long time.

"I think if he had mandated E12 you would have added a billion bushels to your demand right away," says Meyer. "I think sometimes some of these advocacy groups just set the bar too high."